Kaesong wage deadline is extended

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Kaesong wage deadline is extended

North Korea agreed to extend its deadline for South Korean companies to pay their North Korean workers by Friday, providing some room to untangle a gridlock over its unilateral decision to increase wages for its employees at the Kaesong Industrial Complex.

South Korea’s Ministry of Unification, which oversees inter-Korean relations, said Wednesday that the North’s management headquarters for the Kaesong Joint Complex had verbally agreed to extend the deadline as requested by its South Korean counterpart. The original deadline fell on Monday.

The agreement on the extension comes as the two Koreas remained locked in a stalemate Wednesday over settling the issue of a minimum wage hike for North Korean workers at the complex, the last remaining economic collaboration between both countries.

The two sides have been wrangling since February, when Pyongyang independently decided to raise the agreed upon monthly minimum wage for its workers from $70.35 to $74.

In response, South Korea stated that Seoul had no intention of accepting the North’s demand for a wage hike or paying late fees for the South Korean companies that paid their North Korean employees the set wage of $70.35.

South Korea has argued that the move violates the joint operations agreement that calls for issues to be discussed and negotiated by both sides.

North Korea’s move to accept the extension came two days after three South Korean firms agreed to pay an arrears charge for payments owed in March after failing to pay the difference in the wage hike unilaterally demanded by the North.

The managers from the three companies submitted a written document promising they would pay the overdue charges, which runs counter to the government’s stance.

If companies were to pay arrears, it would add up to an extra 15 percent of its monthly payments.

A Unification Ministry official, who spoke on the condition of anonymity, said on Tuesday that the three companies that promised late fees “seemed to have been forced to do it as told by the North [at the joint complex],” suggesting that the government was considering waiving punitive action given the circumstances.

Enforcing speculation that the government was careful in imposing punitive action on the three companies, Unification Ministry Spokesman Lim Byeong-cheol said the government was carefully reviewing the circumstances that led the businesses to promise arrears.

Ahead of the new deadline is the rising expectation that the North may be willing to discuss the wage increase, with Friday marking the last day of joint military exercises between Washington and Seoul.

The12-year-old industrial complex remains the last remaining symbol of economic cooperation between both countries.

BY KANG JIN-KYU [kang.jinkyu@joongang.co.kr]
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